20260804Staff Comments.pdf

RECEIVED
August 04, 2026
KELSEA E. ROSS IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83702
[phone]
IDAHO STATE BAR NO. 12050
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION'S APPLICATION FOR AN ) CASE NO. AVU-E-26-08
ACCOUNTING ORDER AUTHORIZING A ) AVU-G-26-04
CARRYING CHARGE ON BALANCES )
ASSOCIATED WITH THE COMPANY'S ) COMMENTS OF THE
DEMAND SIDE MANAGEMENT ) COMMISSION STAFF
PROGRAMS )
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"),by and through its attorney of record,Kelsea E. Ross, Deputy Attorney General,
submits the following comments.
BACKGROUND
On June 5, 2026, Avista Corporation, doing business as Avista Utilities, ("Company")
applied to the Commission requesting approval to incorporate a carrying charge ("Application"),
at the rate of 4.0% for 2026 and to be effective January 1, 2026, that would be updated each year
based on the newest annual rate approved by the Commission, on the unamortized balances of the
Company's Schedules 91 and 191 ("Energy Efficiency Rider Adjustment—Idaho"). Application
at 1-2.
The Company represented as of May 2026, its Schedule 91 demand-side management
("DSM") tariff rider maintained "an unamortized balance of nearly $28.5 million," which would
continue to grow due to the current rate of recovery of 3.3%that the Commission set in Order No.
37047. Id. at 3.
STAFF COMMENTS 1 AUGUST 4, 2026

The Company stated that it will have to finance the unamortized balance, which will cost
the Company both debt and equity due to the length of time for the proposed recovery, until rates
return the amount of the balance to the Company. Id. The Company believed that without the
requested carrying charge, the Company would have to absorb 100% of the financing costs for
DSM expenditures. Id. The Company believed that an approved carrying charge would alleviate
the financial pressure of the unrecovered balance of Schedule 91 and recognize that financing
comes at a cost for the Company. Id. at 4.
The Company represented that incorporating the carrying charge in the Energy Efficiency
Rider Adjustment — Idaho would be in line with DSM tariffs that other Commission regulated
utilities have set in place. Id. at 1.
STAFF ANALYSIS
Staff reviewed the Application and prior Commission orders related to the Company's
Energy Efficiency(`BE")programs. Staff also reviewed the Commission's recent orders in Case
No. AVU-E-26-01, where the Company requested an increase to Schedule 91 rates to address an
underfunded EE Rider Adjustment balance. Based on its review, Staff recommends that the
Commission approve the Company's request to apply a carrying charge to the balances associated
with Schedules 91 and 191 and authorize the Company to use the Commission-approved annual
customer deposit rate recently approved in Order No. 36836 in Case No. GNR-U-25-01
("Customer Deposit Rate") as the carrying charge applied to that balance. Staff recommends the
carrying charge become effective as of the date of the Commission order in this case.
While Staff believes that customers and the Company are best served by the Company
receiving timely recovery of its prudently-incurred, cost-effective EE expenses that reduce the
Company's power supply expenses, lack of timely recovery creates a financing mismatch between
when those expenses are incurred and when recovery is received by the Company. Timely
recovery eliminates generational equity issues, reduces rates in the long-term, avoids additional
pancaking of rates in future cases, and eliminates the need for financing costs. However, the
Commission has previously recognized the cost of financing deferred regulatory balances by
authorizing carrying charges on several of the Company's other mechanisms. The Company
currently receives the Commission-approved Customer Deposit Rate on balances associated with
its Power Cost Adjustment, Purchased Gas Cost Adjustment, and Fixed Cost Adjustment
STAFF COMMENTS 2 AUGUST 4, 2026

mechanisms. Id. at 4. Staff believes the same regulatory principle would apply to deferred Energy
Efficiency Rider Adjustment — Idaho balances. Like the other mechanisms listed above, EE
expenditures are incurred for customer benefit and recovered through Commission-approved rates.
Staff believes allowing a carrying charge on the Energy Efficiency Rider Adjustment — Idaho
balances would therefore be consistent with the Commission's treatment of other deferred balances
and would help ensure the Company is not required to absorb financing costs associated with
prudently incurred and Commission-authorized expenditures.
In Case No.AVU-E-26-01,the Company and Staff proposed a rate adjustment designed to
recover the existing underfunded balance over a 36-month period. However, the Commission
ultimately approved a 3.3 percent increase rather than the 6.6 percent increase supported by Staff
and the Company. See Order No. 37025. The Commission approved the Company's compliance
filing through Order No. 37047, effective May 1, 2026. As a result, a deferred EE Rider balance
remains unrecovered and will continue to be financed by the Company until recovered through
future rider collections.' Application at 3. Staff believes a carrying charge reasonably recognizes
the financing costs associated with that unrecovered balance.
The Commission has previously recognized that utilities incur financing costs associated
with EE expenditures before those costs are recovered through rates. In Order Nos. 22299 and
22758,the Commission authorized PacifiCorp,doing business as Rocky Mountain Power,to apply
a carrying charge to deferred EE balances tracked through its EE cost recovery mechanism. Staff
interprets these orders to have established Commission precedent that prudent EE expenditures
recovered through a balancing account or similar deferred accounting mechanism may include
recovery of associated financing costs.
The Commission has also approved similar treatment for Idaho Power Company's EE
rider. In Case No. IPC-E-97-12, Order No. 27660, the Commission approved a carrying charge
on deferred EE balances and recognized that financing costs are incurred when EE expenditures
are made prior to recovery through rates. Although the Commission approved a carrying charge
rate lower than that requested by the Company, Staff believes the Order demonstrates the
1 As of May 2026,the Company reports that the DSM Tariff rider maintains an unamortized balance of nearly$28.5
million and by the end of March 2029 it is forecasted to have an underfunded balance of nearly$33.5 million using
the 3.3 percent approved recovery rate.
STAFF COMMENTS 3 AUGUST 4, 2026

Commission's longstanding recognition that financing costs associated with unrecovered EE rider
balances may be appropriate for recovery.
In Staff s opinion,prior Commission orders demonstrate that carrying charges on prudently
incurred EE balances are appropriate. Consistent with these prior Commission orders, Staff
believes it is reasonable to allow the Company to recover financing costs associated with prudent
EE expenditures that have not yet been recovered through rates. The Company proposes using the
Commission-approved Customer Deposit Rate as the carrying charge applied to Schedules 91 and
191 balances and updated annually as part of the Commission's existing process. Id. at 3-4. Staff
believes this approach is reasonable because it relies on an existing Commission-approved rate, is
administratively simple, provides a conservative measure of the financing costs associated with
deferred recovery, and promotes regulatory consistency among Idaho's investor-owned electric
utilities. For these reasons, Staff believes approval of the Company's request is in the public
interest because it provides consistent regulatory treatment of deferred balancing accounts,
appropriately recognizes the financing costs associated with Commission-authorized EE
expenditures,and supports the continued implementation of customer-benefiting energy efficiency
programs.
Staff further believes that the carrying charges should begin accruing on the balances as of
the date of the Final Order in this case,rather than the January 1,2026,effective date requested by
the Company. The impetus for the Company's request, the high Energy Efficiency Rider
Adjustment — Idaho balance, and Order No. 37047 denying the timely recovery of EE expenses
occurred after January 1, 2026, and therefore the effective date should not be retroactively
established prior to the events that caused the Company to initiate the current filing.
STAFF RECOMMENDATION
Based on its review, Staff recommends the Commission approve the Company's request
to apply a carrying charge to the balances associated the Energy Efficiency Rider Adjustment —
Idaho, Schedules 91 and 191,and authorize the Company to use the Commission-approved annual
Customer Deposit Rate as the carrying charge applied to those balances, effective as of the date of
the Final Order in this case.
STAFF COMMENTS 4 AUGUST 4, 2026

Respectfully submitted this 4th day of August 2026.
Kelsea E. Ross
Deputy Attorney General
Technical Staff. Travis Culbertson, Donn English
I:\Utility\UMISC\COMMENTS\AVU-E-26-08 and AVU-G-26-04 Comments.docx
STAFF COMMENTS 5 AUGUST 4, 2026

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 4th DAY OF AUGUST 2026,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE
NO. AVU-G-26-08 /AVU-G-26-04, BY E-MAILING A COPY THEREOF TO THE
FOLLOWING:
ANNI GLOGOVAC SHAWN J. BONFIELD
COUNSEL FOR REGULATORY SR. MGR., REGULATORY POLICY& STRATEGY
AFFAIRS AVISTA CORPORATION
AVISTA CORPORATION PO BOX 3727
PO BOX 3727 SPOKANE WA 99220-3727
SPOKANE WA 99220-3727 E-mail: shawn.bonfield(&,avistacorp.com
E-mail: anni.glo og vac(&,avistacorp.com
avistadocketsgavistacorp.com
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PATRICIA JORDA , SECRETARY
CERTIFICATE OF SERVICE